Human capital management pros have been trying to “fix” performance and goal management for decades, with little success. The drumbeat for doing away with annual reviews reached a fever pitch when, by the end of 2015, 6% or more of Fortune 500 companies abolished their yearly evaluations.
A CEB Global study painted a different picture. The intent of removing annual reviews and using a more informal feedback process was to
- improve performance conversations between managers and employees,
- allow more time for feedback,
- enable managers to differentiate pay more easily and
- improve employee engagement by removing anxiety.
The results have been disappointing. Managers have been unable to step up to new expectations. They struggle with managing performance—setting expectations, providing feedback, and focusing on the future. They also have a hard time explaining the rationale for pay decisions without rating numbers.
CEB concludes that “most organizations will find it too difficult to get their managers to the level needed to make it worth the significant investment required.” We wonder how much of the failure is due to the way organizations select, promote, and develop managers.
Thinking about this reminds us that bold declarations about improving performance still ring true today.
- “Remove fear from the workplace.” Today, companies who develop a transparent, trusting culture where conversations about performance flow easily are finding the transition to a new performance model easier.
- A manager is “a coach and counsel, not a judge.” A talented manager helps people arrive at valid conclusions about their performance.
- “Create and maintain stimulating and enjoyable work-environment, with the aim to attract, develop, and retain self-directed, talented people.” The companies who do that are far outpacing their competition.
Businesses in today’s fast-paced world do not operate on annual goals and benchmarks. They seize opportunities as they arise and modify their plans to adapt to changing conditions. Annual goal setting and performance reviews have always been an artificial construct. Today’s work environment demands a constant flow of performance, feedback, and development.
Creating that work environment requires the help of modern technology. When we were recommending frequent feedback and flexible goal-setting 15 years ago, most companies balked at the administrative burden. The technology was too hard to manage. Nobody wanted to log into a performance management system every time they wanted to document a conversation or event. The tools were there, but they went unused.
We can make three recommendations to support your efforts to create your next generation performance management.
- The modern workplace demands collaboration tools where ideas and feedback can flow freely. They must be embedded in applications people use in their daily work, or they will be ignored. Powerful tools such as Slack, SuccessFactors Jam, Microsoft Teams, and many others are filling the gap.
- Your performance management system must be capable of flexible goals and frequent easy, mobile-enabled check-ins. These must also be embedded in the daily workflow.
- Your reporting system must enable reports and analytics that will allow business leaders to hold managers accountable for developing their people.
Does your talent management platform measure up?
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